In this chapter, we described the foundation marketplace. We explained how to conduct research and prioritize potential grant makers and how to write proposals or submit applications to obtain grant funding. We also described the “Grant Cycle” and underlined the importance of feedback and reporting back to foundation supporters. Finally, we discussed the reasons applications to foundations might fail.
Definitions and Categories
Foundations contributed $41.21 billion to nonprofit organizations in 2008 and together they account for 13% of all philanthropic giving in the United States (Giving USA Foundation, 2009). For some nonprofit organizations, they are the sole financial supporters and so the ups and downs in the foundation budget controls the life and death of those organizations. For others, foundations are only one of a variety of different categories of supporters. In either case, no nonprofit today can deny the importance of foundation grant funding, and so no experienced fundraiser should go about their business without having at least some preliminary knowledge about how foundation fundraising works.
In the United States, the Internal Revenue Service at the United States Department of the Treasury provides the most comprehensive information about the definitions and operations of foundations. Through the IRS website, you will be able to find not only definitions and categories of private foundations, but also information on the life cycle of a private foundation, their filing requirements, restrictions on their political campaigning as well as other related tax information.
In addition to the official website information, the IRS has also designed a set of educational slides at Stay Exempt (Tax Basics for Exempt Organizations) to explain Foundation Status Classifications. Working through this tutorial will help you greatly in your understanding of the foundation world in the US.
Foundation Funding Trends
You will find several online resources that have information about foundation giving trends, including the National Center for Charitable Statistics. These sources, however, all reference one central website for their source of information: the Foundation Center.
The Foundation Center provides the most comprehensive information about the largest number of foundations in the United States. You will find information on fundraising, research studies, and blogs on the nonprofit literature in the “Gain Knowledge” section of their website.
When searching for particular grant makers for your particular needs, you may need to subscribe to the Philanthropy News Digest. You will find the latest conferences and Request for Proposals there. Alternatively, you may either subscribe to or get free access to Foundation Directory Online through your local public library.
To find the biggest American foundations in terms of their overall assets, click here. The same website also provides a ranking of top US Foundations by total giving. Rankings are also available for top corporate and community grantmakers by asset size and by total giving.
Users in the United Kingdom will find that the resources available at the Directory of Social Change are invaluable. They provide many of the same services as the Foundation Center in the United States.
Facts and figures about the sector are also available from the Association of Charitable Foundations. They also provide solid advice on the preparation of applications and in collaboration with the Charities Aid Foundation produced the excellent:
Information is provided on:
- top-level financial trends
- funding preferences
- community foundations
- top 10 charitable grant-makers
- staffing and resources
- grant application approvals
Preparation and Planning
Before you get started in your application, we would strongly encourage you to watch this 30 minute long grantseeking basics video provided by the Foundation Center. As with all the materials they provide – the advice is very solid.
In assembling an application the best advice we can give is that as much as possible should be learned about the target foundation(s). This careful process of research involves a number of steps, as we outline in the text.
Having identified a list of potential prospects, perhaps by using the resources of the Foundation Center or the Directory of Social Change, it is then necessary to browse a target foundation’s main website and learn about their funding philosophies and strategies. The Ewing Marion Kauffman Foundation, for example, is quite explicit about its “investment” philanthropic mindset. It considers its grants as investments, so it looks for a return on the ‘investments’ it makes. The organization understands that, even though it is one of the largest foundations in the world, its ability to solve social problems is relatively small. Thus, it developed the “leverage” philanthropic principle, where it seeks a high return on the small grant investment it can afford. The Broad Foundation takes the same approach and practices “venture philanthropy”.
In terms of philanthropic strategies, the Annie E. Casey Foundation focuses on making “multi-year, multi-site commitments that enable them to invest in long-term strategies and partnerships that strengthen families and communities.” In seeking grants from this organization a nonprofit may have to gear up for relationship building in a way that may not be necessary with other foundations.
Having assessed the fundraising strategies and philosophies the researcher can move on to descriptions of exactly what they fund, their fund priorities and objectives. It may also be possible to locate examples that illustrate their funding philosophy, strategies, priorities and objectives.
Take the John Templeton Foundation as an example. It is ranked No. 35 by the market value of its assets, based on the most current audited financial data in the Foundation Center’s database as of November 19, 2009. As of 12/31/2007, it has a total asset of $1,521,282,234.
Through the John Templeton’s Foundation’s website, it is possible to access a set of VERY detailed set of descriptions about what they fund. Within each one of the five core funding areas, you find not only descriptions and budget size of each specific program, but also a set of featured grants that have been funded under that particular program in the past. You will find for example, that they feature grants ranging from $735,000 to $8,148,322. Recipients of their grants include both academics and nonprofit practitioners. For each featured grant, they provide information about the duration of the grant, the main individuals involved, the specific topics that each grant supports as well as links to these recipients. This information is readily available at any given point of time when you search their website.
It will also be helpful to read about the history and the changes that might have happened to your target foundations.
Consider the John Templeton Foundation again. With the passing of its founder, the late Sir John Templeton the foundation undertook a major transition. During this period, it stopped all its grant application operations and redesigned the entire process under the new leadership of Dr Jack Templeton.
Fundraisers need to be able to follow such developments, watch for transitions and so predict future funding opportunities. For example, the featured grants currently listed on Templeton’s website were all granted before this reconstruction. Depending on how much the principles have changed, one needs to use these featured examples cautiously. Without an awareness of this recent transition, fundraisers could be mindlessly applying principles that no longer have relevance.
Similar to the John Templeton Foundation, The Rockefeller Foundation provides examples of what they fund. The Kresge Foundation also provides examples of recent grants. Other foundations provide the entire list of all grantees that they have ever supported. This includes the W.K. Kellogg Foundation, the William and Flora Hewlett Foundation and the Carnegie Corporation of New York.
Finally, you need to be aware if foundations are making grants on behalf of others, instead of for themselves. This is particularly important for community foundations. So, you can better understand their funding objectives.
Prioritizing Effort and the Initial Contact
Matching your organization’s fundraising priorities with fundraising priorities of the organization is the very next step after your foundation research. When making initial contact, it is important that you either seek out existing links to the funder, who may provide you information outside of the formal application routines, or follow the application guidelines strictly.
Here, you will find a selection of instructions provided by foundations. Some of them require an initial letter of inquiry before the full application, some of them do not. Some of them will provide feedback on the initial letter of inquiry, while others do not. Depending on the foundation’s preferences, you would need to design your fundraising process accordingly.
The Ford Foundation organizes their grant application by region. The David & Lucile Packard Foundation organizes their grant application by program areas. The Carnegie Corporation of New York accepts all letter of inquiry through one central website.
While some foundations are quite open about accepting unsolicited initial contacts, others are more selective. The Andrew W. Mellon Foundation for example, printed explicitly in bold on its Grant Inquiries website that “The Foundation does not make grants to individuals. Unsolicited proposals are rarely funded.” The Starr Foundation announced that the foundation “no longer accepts unsolicited proposals”, while the Annenberg Foundation’s grants are only offered on an “invitation-only basis”. We suggest that you respect the specifications of these foundations and seek ways to receive an invitation before making grant inquiries.
Where full proposal guidelines are published by a foundation, fundraisers need to ensure that they adhere to the instructions provided.
The National Science Foundation, for example, publishes detailed guidance for each of its program areas online. The Decision, Risk and Management Science (DRMS) program under the Division of Social and Economics Sciences, for example, has all its program directors as well as full proposal guidelines readily available.
In researching grants from large foundations such as the National Science Foundation, it can be helpful to research previous recipients from the same program to get an idea of the organization’s priorities and interests.
Some successful grantees may even be willing to share their proposals. Such sharing is commonplace in the domain of academic research grants.
The more information you can have before making a submission, the better!
There are many resources on the web giving details of how to write a good proposal. The following are two good examples of what is available:
- The Minnesota Council on Foundations has an excellent guide to Writing a Successful Grant Proposal. It is a very helpful starting point.
- The Foundation Center has a nicely laid out short course on writing a grant proposal
The Corporation for Public Broadcasting receives a plethora of grant proposals every year. Here is a list of their tips for writing a good grant proposal.
Some foundations are quite explicit about what they expect to see in the reports, including financial and narrative reports. It is important for fundraisers to take the time to learn and to follow these guidelines.
The Robert Wood Johnson Foundation provides such information in their Grantee Resources section. The John S. and James L. Knight Foundation provides evaluation guidelines for interim as well as final reports.The Walton Family Foundation provides financial as well as narrative report guidelines for current grantees. The Duke Endowment has a continuous evaluation system in place to track the long-term effect of their granting strategies and efforts.
The Annie E. Casey Foundation provides links to all its long-term strategic grant making programs. Through the Annie E. Casey Foundation website, it is possible to access the results of all its major initiatives. Take the Plain Talk initiative as an example, it is a program designed in 1993 to “help communities protect their youth from the consequences of early sexual activity.” As the recipient of this grant, Public Private Ventures, created a website called “Plain Talk” as well as a wealth of other resources, all of which are made available through the foundation’s website. As you might imagine, foundations like the Annie E. Casey foundation, which focuses on multi-year strategic grant making strategies, will become a partner of your project and you will need to be prepared to deliver and to nurture your partnership relationship over an extended period of time.
Such relationship building is not only a one-way process where grantees need to be mindful of meaningfully updating the funder of their progress. Foundations also provide grantees with information about what grant strategies or practices worked and what didn’t work in the past, and how they may decide to operate differently in the future. The Cleveland Community Foundation provides such information in their Grantee Newsletter.
The Grant Cycle
The Harry and Jeanette Weinberg Foundation, Inc. provides an excellent example of a grant cycle. It outlines its grant cycle for the entire calendar year, including requirements for each step involved in the process. So when preparing the letter of inquiry, you are strongly recommended to also read through all the information provided for the entire application process, so you can address their interests from your first contact.
The Chicago Community Trust also provides a grants calendar with all upcoming deadlines clearly marked.
The Directory of Social Change provides a series of directories that provide details of funding sources throughout Europe and beyond.
Similarly the Grantsmanship Center provides a directory of international funders, broken out by country of activity.
There are many other directories and lists but these tend to focus on specific categories of interest or nonprofit activity.
- Center for Effective Philanthropy (2006) In Search of Impact: Practices and Perceptions in Foundations’ Provision of Program and Operating Grants to Nonprofits, Center for Effective Philanthropy, Cambridge MA.
- Delfin, F., Jr., and Tang, S.Y. (2006) ‘Philanthropic Strategies in Place-Based, Collaborative Land Conservation: The Packard Foundation’s Conserving California Landscape Initiative’, Nonprofit and Voluntary Sector Quarterly, Vol. 35, No. 3, 405-429.
- Foundation Center (2008). Highlights of Foundation Giving Trends. The Foundation Center, New York, NY.
- Guo, C., and Brown, W.A. (2006) ‘Community Foundation Performance: Bridging Community Resources and Needs’, Nonprofit and Voluntary Sector Quarterly, Vol. 35, No. 2, 267-287.
- Lawrence, S. and Mukai, R. (2008). Foundation Growth and Giving Estimates: Current Outlook, The Foundation Center, New York, NY.
- Martin P (2000) ‘Preparation Before Proposal Writing,’ New Directions for Philanthropic Fundraising, 28 (Summer), 85-95.
- O’Heffernan P. (2000) ‘Raising Money Internationally: Foundations and Beyond’, New Directions for Philanthropic Fundraising, 28 (Summer) 51-66.
- Porter, R. (2005) ‘What Do Grant Reviewers Really Want, Anyway?’, The Journal of Research Administration, Vol. 36, No. 2, 5-13.
- Rentz L., Lawrence, S. and Treiber R.R. (1995) Foundation Giving: Yearbook of Facts and Figures on Private, Corporate and Community Foundations, The Foundation Center, New York.
- Rooney P and Fredericks H.K. (2007) Paying For Overhead: A Study of the Impact of Foundations’ Overhead Payment Policies on Educational and Human Service Organizations, Working Paper, Center on Philanthropy at Indiana University, Indianapolis, IN.
- Sargeant, A. and Pole, K. (1998). Trust Fundraising – Learning to Say Thank You.Journal of Nonprofit and Voluntary Sector Marketing, 3(2), 122-135.
- Carlson, M. (2002). Winning Grants, 2nd Ed. Jossey-Bass, San Francisco, CA.
- Dorner J, Seely J and Baumgartner-Cohen J (2004) Writing Bids and Funding Applications, Oxford University Press.
- Foundation Center (2007) The Foundation Center’s Guide To Proposal Writing, 5th Edtn, Foundation Centre, New York, NY.
- Golden, S.L. (1997) Secrets of Successful Grantsmanship: A Guerrilla Guide to Raising Money, San Francisco, Jossey-Bass.
- Schladweiler, K. (ed.) (2001) The Foundation Center’s Guide to Grantseeking on the Web, The Foundation Center.
- Association of Charitable Foundations (2007) Grantmaking by UK Trusts and Charities, Association of Charitable Foundation, London.
- Association of Charitable Foundations (2008) Applying To A Charitable Trust or Foundation, Association of Charitable Foundations, London.
- Clay, A (ed.) (1999) Trust Fundraising, Charities Aid Foundation, West Malling, Kent,
- Leat D (1992) Trusts in Transition: The Policy and Practice of Grant-Giving Trusts, Joseph Rowntree Foundation, York.
- Leat D (2007) ‘What Makes Foundations Tick?’ in Mordaunt J and Paton R, Thoughtful Fundraising, Routledge, London, 112-127.
- New C.C. and Quick J.A. (2003) How to Write a Grant Proposal, John Wiley and Sons
- Tovim R (2004) Fundraising From Grantmakers Trusts and Foundations, Directory of Social Change, London.
No act of kindness, no matter how small, is every wasted.Aesop